Commentary and Research Papers
January 21, 2026
2026
For much of the past decade, large-capitalization stocks, particularly the Magnificent Seven mega-cap technology companies, have dominated investment returns. Yet as market dynamics evolve and secular growth trends accelerate across multiple industries, small-capitalization companies may increasingly gain investor attention. For sophisticated investors seeking meaningful, long-term out performance, active management of small to mid-sized companies by a manager with a proven track record across multiple market cycles remains one of the most effective paths to superior returns.
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January 13, 2026
2026
2025 was a miserable year for most active managers; it turns out many of them were not actually straying very far from the most popular stocks. Our strategy is to look for unique (as much as is possible), mispriced stocks/companies that generate attractive returns and have solid balance sheets with experienced management teams. We also want the potential to grow. We believe this approach will probably be more important over the next few years than it has been over the recent past.
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January 13, 2026
2026
Economic conditions in the fourth quarter remained broadly constructive, even as growth moderated from the very strong 4.3% pace recorded in the third quarter. U.S. economic activity continued to expand, consumer spending remained resilient, and inflation pressures eased. Although job growth slowed from earlier periods, unemployment remained relatively low and weekly jobless claims were contained. The Federal Reserve cut rates for the third consecutive month in December, by 25 basis points, but signaled a more mixed outlook for future cuts.
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January 13, 2026
2026
U.S. equity markets closed December on a mixed and choppy note, as strong year-to-date gains gave way to profit-taking and thin holiday trading. Investor sentiment during the month was shaped by expectations for Federal Reserve rate cuts in 2026 and ongoing sector rotation following a powerful multi-year rally in 2023, 2024 and 2025. While short-term market volatility picked up late in the month, the broader backdrop remained constructive, supported by resilient corporate earnings and economic data overall, moderating inflation, and optimism that continued easing of monetary policy could help extend the economic expansion into 2026.
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January 13, 2026
2026
Equity markets closed 2025 with solid gains, extending a run that now includes three consecutive positive years for U.S. stocks. For the full year, the Dow Jones Industrial Average rose nearly 13%, the S&P 500 gained more than 16%, and the Nasdaq Composite advanced just over 20%. While returns were broadly positive, market leadership once again skewed toward the largest companies, with the equal-weighted S&P 500 still trailing the cap-weighted index by a wide margin.
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December 9, 2025
2025
It was a month of two distinctly different chapters for equities. Stocks declined steadily through the first 20 days of November, only to stage a swift late month rebound that pulled the major indexes back to flat or slightly positive territory. November also saw a meaningful correction in many previously high-flying momentum stocks, including lofty-valuation stocks related to artificial intelligence (AI), quantum computing, cryptocurrencies, data cloud, alternative energy, and others.
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Founded in 1984, Pinnacle Associates, Ltd. is a forward thinking, multi-billion dollar investment advisory firm focused on transparency and putting clients first. We provide advice to individuals and families, institutional investors and other financial institutions.
